Due to potentially far-reaching liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund), many commercial tenants have been rightfully cautious about leasing property that might be contaminated.Often, a prospective tenant will make sure that a Phase I environmental assessment is performed before signing any lease. Recently, U.S. EPA issued guidance which should give those commercial tenants some comfort.At the end of 2012, revised guidance was released on how the EPA intends to exercise enforcement discretion for tenants that lease contaminated property. Under CERCLA, there is a defense to liability if an owner of property was a “bona fide prospective purchaser” (BFPP) before entering the transaction. Technically, tenants are not BFPPs because they do not purchase the property in question. However, the revised guidance clarifies that these tenants can also obtain liability protection under certain conditions. Under the CERCLA statute, a tenant may “derive” BFPP status if the owner already satisfied the BFPP requirements. The tenants are protected from liability as long as they did not dispose of hazardous substances on the property and did not impede the performance of any restoration or response to contamination. If the tenant otherwise satisfies the general requirements of a BFPP owner, the EPA would likely exercise its enforcement discretion and not pursue the tenant.Even if the owner is not a BFPP or loses its BFPP status, a tenant can still obtain its own BFPP status provided that it complies with the guidance as if it were an owner. If that tenant has not polluted the property and has not impeded a response, it can generally maintain a BFPP defense, even if the owner is not. Moreover, in limited instances, the EPA will provide a “comfort letter” to a prospective tenant if the agency decides it is “appropriate” in order to “further the public interest.” A comfort letter would indicate the agency's intent not to pursue the tenant for any cleanup claims, minimizing some of the risk and uncertainty in transactions involving contaminated property. To ensure the tenant meets the requirements of a BFPP and qualifies for these defenses, guidance from experienced legal counsel should be sought early in the process.

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